After a week of rumors, Embracer-owned studio Piranha Bytes, the developer of the Gothic, Risen, and Elex games, has acknowledged that it is in “a difficult situation” but says it's still trying to find a way forward for its next project. Should it be unable to do so, the studio will be closed.

Word of potential trouble at Piranha Bytes surfaced last week on the Elex 2 subreddit: An admin noticed the studio's next game, codenamed WIKI6 and expected to be Elex 3, had been removed from the German government's funding page. 

The Piranha Bytes homepage had also been changed to just a studio logo and address, and the previously-active Piranha Bytes YouTube channel hasn't had a video updated since November 27, 2023. German gaming site Gamestar (Google translated) then reported on multiple sources saying the studio was facing closure.

Piranha Bytes has now acknowledged that the situation is not good. “Yes, it's true,” the studio said in a message posted today. “We, Piranha Bytes, are in a difficult situation. There are a lot of news about us circulating right now and this is our answer: Don't write us off yet!”

There's still no indication as to what the studio's next project is intended to be, but it sounds like it won't be backed by Embracer: “We are focusing on this goal with all our strength and [will] do whatever it takes to find a partner for this project,” the message says.

Piranha Bytes was founded in 1997 and developed a reputation as a maker of large, complex, janky RPGs through the Gothic, Risen, and Elex games. It was acquired by THQ Nordic, a division of the Embracer Group, in 2019 at the height of the shopping spree that turned Embracer into a genuine games industry giant.

But Embracer ran into trouble in 2023 after a $2 billion investment deal fell apart, and the fallout of that collapse has been devastating: Hundreds of employees laid off, and multiple studios have been closed over the subsequent months. The wording of Piranha Bytes' message bears echoes of the situation at Timesplitters studio Free Radical Design, which was reported to be facing “potential closure” in November 2023. 

Ultimately, that's what happened: Embracer was unable to find a buyer for Free Radical and officially shuttered it in December. Now Piranha Bytes is facing the same situation: A representative said that if the studio is unable to find a new partner for its next game or to move forward as an indie studio, it will be shut down.